Here are some key quotes from my latest podcast with Rado Lipuš, Founder & CEO of Neudata, discussing alternative data sets and sources:

“The term alternative data wasn’t widely used yet. But anything which was related to data sources, which were not mainstream and were a bit unusual. And are definitely not on mainstream platforms, like FactSet, Bloomberg, Thomson Reuters, and those large data providers.”

“For each data set, we will look into 100 different factors, which we try to analyze and which we try to provide on our platform. And it’s a nonstop operation.”

“So it’s finding new information, making sure we capture everything as we work with that company. We need to educate a lot of these companies, how it works. We are not selling the data, we are actually just providing the metadata.”

“We have 5,000 data sets on the platform today, of which 1,150 we have written up detailed reports. And so the supply side is still growing. And it’s a big challenge to stay on top of it.”

“Hardly any client just uses one data set on its own. It’s typically in a combination with different factors, different data sources. So the use cases have really varied and depends who the end consumer of that source is.”

“Some data set types have more alpha or higher value to our client base. For instance, think of transactional data sets, credit card data sets, receipt data sets, any sort of real transactions, which are recorded somewhere by a technology company, or by a payment provider or software company.”

“The increase of data sources in Europe, in the UK and Asia and China or Japan, it’s growing at a much faster rate than in the US, for instance. So the supply side from China is huge. And so it’s really difficult to understand the legal implications of those data sources and the compliance issues.”

“What we’ve seen is buy-side firms who research hundred plus data sources. They have really thought about this process. And they have built out teams for how they onboard data from sourcing, testing, to then actually brokering and putting data sources in production.”

“We’ve seen the emergence of free data sources. So many providers have gone down this sort of ‘freemium’ model. And we just haven’t seen that sort of flexibility by providers before. And also, customizing feeds, which are very specific to fund managers who need so much more bespoke products. In a way, it’s a sign of the industry maturing.”